There Is A Plan To Increase The Price Of Pertalite, LPG And Electricity, Observer: The Government Is Not Aware Of The Dangers In Front Of Eyes?

Illustration. (Photo: Doc. Antara)

JAKARTA - The government plans to again increase the price of RON 90 Pertalite, 3 kg LPG and electricity rates. This discourse was put forward by the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif in a Working Meeting with Commission VII DPR RI, last Wednesday, April 13.

In response to this, the Executive Director of the Center of Law and Economic Studies (Celios), Bhima Yudhistira, said that the discourse on the price increase should be closed because the increase in only one type of energy regulated by the government, such as 3 kg LPG, poses a risk to the purchasing power of 40 percent of the group. the bottom line is huge.

"Inflation is estimated to reach 5 percent in 2022 if the government insists on increasing the price of pertalite and 3kg LPG at the same time," Bhima told VOI, quoted Monday, April 18.

Thus, like it or not, the lower class will continue to consume subsidized LPG gas because it is a primary need so that it will have an impact on increasing the poverty rate.

"The impact on social turmoil must also be watched out for, horizontal conflicts between communities due to the widening inequality between the haves and the have-nots can trigger a multidimensional crisis," he added.

He added that if prices continue to rise persistently and successively, people will eventually reduce their consumption of other goods, such as delaying the purchase of household appliances, electronics, automotive, apparel and other necessities.

"The worst effect is the closure of MSME business actors in the food and beverage sector because they are not strong enough to bear the rising production costs. If MSMEs go out of business, we can estimate for ourselves how many will become new unemployed, let alone 97 percent of the labor absorption is in MSMEs," explained Bhima.

Furthermore, he added, another effect of the increase in LPG 3kg, is that it can cause panic buying because people anticipate price pressures by buying in large quantities before the policy of increasing LPG is carried out. On the other hand, the 3kg LPG sales mechanism which tends to be open further increases the risk of LPG shortage.

"The government should be able to contain the difference in the economic price of 3 kg LPG through a cross-subsidy mechanism resulting from the windfall of state revenues from mineral and coal exports and plantations," he added.

Based on the simulation of the increase in crude oil prices, the government is projected to experience a surge in tax revenues and non-tax revenues of around Rp. 100 trillion.

"If the deficit swells again due to energy subsidies, efficiency in government spending and postponement of mega projects such as IKN must also be carried out," added Bhima.

As a shadow, according to Bappenas, IKN needs at least IDR 468 trillion and 53.3 percent will be taken from the APBN until 2024. There is no other way because the urgency at this time is food and energy price stability, not the relocation of government buildings.

"This is the problem whether the government is aware of it or not, is there a chasm of economic danger in front of our eyes?" Bhima concluded.